Archive for 2005

Weekly Wrap Up

On the whole, this was not a good week for the market. Although it stayed above resistance levels on the way down, it showed very little ability to go up.

I am very glad of Monday’s decision to go 1/2 cash in this directionless market.

Even Friday’s $2 drop in oil failed to act as a stimulant.

Gold dropped $30 for the week but the NEM Jan ’07 $45s actually gained .50 from our open while the Dec $55 expired worthless and gave us another .80 profit. If gold holds $500 this month, it will be a safe bet for the year. This month, I will sell the Jan $52.50 for $1.35 since I am not confident in the direction.

Monday’s TOTD GG was a disappointment for the week if you didn’t get out on the pullback. Buy out the Jan $22.50 at .25 for a .75 profit if you are still in it as the risk reward isn’t there to let it ride. The stock is sitting right on the 50 dma which has proved to be a good support. Absolutely get out for a small loss if the stock goes below $19.50.

INTC Jan $25s are up to $1.65 despite an up and down week for a 30% profit.

SHFL Jan $25s picked up an amazing 60% from Monday’s call, I am out of this one.

HSY May $50s hit out target of $9 so we are out with a 23% profit.

The TWX Jan ’07 $15s look strong for $4, a .30 profit to date. I will be looking to sell the Jan $20s for .50 if I get the chance.

MOT is close to my $22 entry point. As predicted, NOK was a much better bet for the week.

Oil stocks did not have a great week in the end but we were saved by following the Valero Rule (see link on right). If oil prices come back, look for COP to be a new leader.

YHOO actually outperformed Google for the week, as expected.

BCRX and MYOG remain strong. The BCRX Jan $15s are up just 10% but we could have picked up an extra quarter if we had sold the current $15s (albeit with a lot more stress).

VIA suffered from spending $1.6Bn on Dreamworks but not as much as I thought it would.

WMT Jan ’07 $45s picked up 8% and we may…
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Finally Friday

Let’s End this Week With a Bang!

If the early pre-market holds up, this will be a heck of a day.

The dollar continues to decline and gold is finally behaving normally and heading back up but oil remains down below $60 (which is good).

Unfortunately, I am way too sick to enjoy it…

Sorry but no trades today for me.

Good trading to you,

- Phil

Wednesday Wrap-Up

I’m sorry I missed the afternoon trading, especially on CHK! I was too busy to buy it when I made my comment at 10:30… Rumor on CHK is that the two top people bought 1.5M shares of stock very recently (no, I did not know that this morning).

Although it was good for a quick buck, I was not satisfied with TOTD GD’s action today. The recommended puts did finish up 10% due to increased volatility but, as I mentioned this morning, the stock looks too strong and I am taking the money and running.

The Dec $110 puts opened at .35 and promptly went to .60 where I sold but then I picked them up again for .20 (never go back to the well in the same day!) where I am stuck. A disciplined investor would have taken the nickel loss on the second trade and preserved a .20 (50%) profit but that trader wasn’t me!

Apple bounced back from the magic 5% number that we talk about but only 1% – still down $3 for the day, this can still go either way.

TSO did, in fact, outperform VLO today but, to be fair, VLO opened down $1 – still a ways to go before they are even.

HET made a great afternoon comeback – we will see if it can break above the 200 dma of $68. My old punching bag LVS continues to be a train wreck.

PKS went the wrong way fast with the Jan $7.50 puts losing .20 (30%) in one day. The Dan Snyder team took over today and they say they can turn it around.

Gold got yanked all the way down to $506 – amazing action! I should go consult in Dubai, I could have saved them a lot of money over there…

Remember on the FSH trade that we do not want the stock to go over $65 until late January. These trades take a lot of patience.

I will not be optimistic again until the Nasdaq moves up but that is a real possibility as I think Ebay, Amazon and other on-line shoppers cannot be held down in the face of some stunning numbers that are being bandied about.

Thursday Wrap-Up

Another sad day on the markets.

Like I said this morning, between options and the “wall of worry” it’s very hard for any traction to be gained.

The homebuilders were mixed, sentiment is very bad in this market and even good guidance is quickly forgotten and traded away.

I underestimated AMGN, they made it through resistance all the way up to the 5% barrier. I hate to call a stock that has recently doubled a buy but it is.

BSC was a great performer today with the entry all the way down at $112 and giving us a quick 4% on the day. I will sell this at $115 but hold it with a $1 trailing stop.

MO was great as the puts lost only .15 at the decision so we are in on the Jun $85 calls for $1.85 (counting the loss on the put). I think only option expiration is holding this down, next month will be interesting.

BCRX is way stronger than I thought, our 12% seems very safe!

SNDK exceeded my expectations and went up 10% today, too bad I didn’t like the option prices and I stayed out of it. There was no shortage of entry points as it just kept going up all day.

Just going down all day, as usual was GM. I really can’t imagine who buys this stock…

Very glad we got out of the GD trade, the stock flew up 2% this morning and stayed there.

NEM held up like a champ on a bad gold day. GG and MRB also posted gains.

TOTD TGT didn’t hit my bid but I picked it up for $4.50 around 1pm. I’m glad I wasn’t staring at it because it had a rough day but ended up a nickel.


ADBE had nice earnings but ORCL is a disappointment so no help for the Nasdaq tomorrow.

MCD is throwing an option day sale at $35. The Jan ’07 $40s are still a good buy at $2.60 and the Jan ’08 $35s are not bad for $6.40. I expect the real movement to come in the next quarter because cheap trumps healthy when budgets are squeezed as they are all over the US and Europe this year.

LVS is now down 8% since we shorted on 12/1 and about to hit the 200 dma so I am out of this one until it tests.…
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Trade of the Day – TGT

I think this stock is just waiting for it’s options to expire to make a nice move up this month.

They had a $1.50 jump since a well-deserved UBS upgrade on the 12th and I think the stock is just resting on its 50 dma of $54.50 before legging up after options expire. It should pull back to the $53-54 range today but is likely to finish tomorrow very close to $55.

What I really like about the stock is the low cost of the Jan $50 call @ $5 (a .60 premium) coupled with the fairly large amount of shorts (12M) who will be looking to unwind their position as soon as this stock tops $55. I am going to bid $4.25 for the call and hope to pick it up cheap but, if the stock turns up I will pay up to a .75 premium.

The company is giving fairly conservative guidance for the quarter of 5% growth which will still take it to earnings that will beat ’05 by 10%, even after a very disappointing 2nd quarter. The stock is just .80 over last year’s high and 13% under this year’s high.

On this trade I will be looking to exit at +.75 with .25 trailing stops behind that level.

Today’s CPI numbers looked good but the core was actually not so hot so it will be interesting to see how the markets take this news, which may increase the possibility of another Fed hike next year.

I’m looking for a weak open that gains strength but I may just be hoping…

Thursday Thoughts

The market is climbing a “wall of worry.” I don’t know if that is a good thing because it seems that at some point the market will “have a great fall” if just one of those worries looks legitimate.

We should be happy with the DOW, S&P and Nasdaq all comfortably above my support levels but I see potential problems and until we see DOW 11K+, Nas 2,300 and S&P 1,300 I won’t be all that comfortable going into January.

Gold is all the way down to $504 this morning and I’ll bet PDG wishes they had accepted ABX’s offer last week! The strongest remaining gold stock is our NEM pick but look for that to give up a bit if gold doesn’t rebound.

ATVI is a major disaster with lowered guidance that will drag down the whole game industry. People will read into this that this ties in with BBY’s problems so anything electronic may suffer until someone comes out with positive news (I’m betting it will be Piper’s channel check on Apple).

Microsoft is paying people to like their stock with a 12.5% dividend increase (and no special this year which is what people were worried about). This does not make them a buy yet.

Copper is taking off again but it will be hard to stop the downward momentum of PD and PCU.

A draw down in natural gas of less than 150U will cause the price to drop back below 15. This week last year the drawdown was 60U so I think the expectations are silly but we’ll see.

SNDK got an uprgrade today and I think this stock has taken enough of a beating that it will certainly rally back to $55. I don’t like the options on this stock as the premiums are outrageous but they did get a win in court and may hold some valuable patents down the road (if they are not ultimately found to be the property of STM in another suit).

Just when you thought the BCRX trade was going to get away from us, the company stabbed shareholders in the heart by offering up another 2M shares (8%) for sale at $13.46. The reason for the cash infusion is to rush development and testing of their flu vaccine so I still like the stock as a hold, if the Jan $15s we sold get wiped out then our…
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Re Building

Another scary start to the morning today. With options expiring tomorrow and the quarter coming to an end, anything can happen.

LEN beat expectations for the year and gave in-line guidance for next year (in line meaning growth of 15%). This should continue the run on home builders (we called the bottom just right on the 8th).

WLS is a nice play if you are patient, they dropped 33% in October over issues that had mainly to do with a temporary (9 month) misalignment of demand (high) vs. homes available (low). In essence, they were sold out… I like the stock at this level ($110) as a straight buy and hold through January earnings. A stop of $100 is unlikely to be tested and good earnings could easily put this stock back over $120.

Other builders I still like for additional movement into January’s earnings:
TOL – buy the stock ($37.97), sell the Jan $40 for $1.25 (3%)
DHI – Jan $35 for $3.90 ($1 premium)
PHM Jan $40s look nice for $3.95 (a $1.15 premium)
TOA is also in a good spot to make a move with Jun $20s priced at $2.50 (a $1.91 premium)

CVCO is straight up since the call on the 12th but I think it is only being held down by the 50 dma and will continue up from there.

Watch TOL closely for a lead on market direction an none of these trades are on if LEN doesn’t open up. The black cloud hanging over the industry is the strong possibility of an inverted yield curve which could cause panic.

Mid Week Musings

PFE is a not a good company. They boosted dividends, one would assume because they can’t think of anything better to do with their money even though you could practically throw a dart at the biotech sector and pick a winner. The company also did not buy back any stock (although it is authorized to buy back Billions) while it sat at 8 year lows last month.

Revenues (-8%) and profits (-30%) going to be off this year but, with the stock off by almost 50% since early ’04, you would think it’s a bargain. Don’t. Just stay away from this thing.


Oil builds were higher than expected but we could have known that was going to happen when VLO opened down. CHK was a gift down at $32.60, already back to 33.20 in an hour!

SIRI has now developed a channel at $6.86, staying in this spot indicates it is being held down for option expiration.

I’m not sure which way GD will head now. Surprisingly, analysts seem to like the deal more than I thought. The Jan ’07 $120 puts are up $1.40 for the day and this would be a good spot to get out with a small gain given the uncertainty ahead. I’m stuck with a batch of $110 puts I picked up for .20 (couldn’t resist) but I already made a profit on the initial put position so it’s house money…

The dollar is collapsing against the yen which should be good for GM, bad for Toyota (TM), SNE and other Japanese companies where a couple of percentage points matter.

This goes back to my dreary weekend theory that our debt levels are unsustainable and the hint that the Fed may stop tightening might make our markets happy but scares the hell out of foreign investors.

I will have to take my head out of the sand and reassess the markets as this may be a trend that doesn’t stop.

Trade of the Day – General Dynamics

Well, I was looking for something to short and this just dropped in my lap.

GD was just turning it around this year, adding $800M in cash on slightly improved sales over last year. I had been looking at them as a buy since they have come off their high of $121 in October and have come to a rest at the 200 dma of $111.

All that just changed though as the company announced it will pay a 33% premium to acquire ANT for cash. This isn’t just all the cash GD has, it’s another $1Bn they have to borrow!

Now Anteon is an OK company and a nice fit with General Dynamics but this company only earned $61M last year and should earn about $80M this year. The company had a p/e of 20 but, for some reason, GD thought they’d rather pump that up to 28 for the purchase.

GD investors have already been ponying up a p/e of 16 this year and I just don’t think they are the type of people who want to see the company go $1Bn in debt to add 7% to the bottom line.

Being an option expiration day, I am loving the $110 puts for .30 if they can be had for that little. This is a very risky trade but could work out well if an analyst doesn’t like this deal.

The most sensible trade is the Jan ’07 $120 puts for $11 (a $3 premium) which is also a play on inevitable cutbacks in military spending. This trade should be exited at $10 because that means the stock is really heading the wrong way. That contingency can also be covered by picking up the Jan $115 calls for $1.20 which is what I was going to recommend before they made this deal.

If you couple the Leap purchase with the Jan calls, you can even offset that by selling the Jan $105 puts for .50 but that would limit the upside too much for my taste.

In any event, $108 is my downside target which should boost the put by about $3.

Wednesday Thoughts

China just upped their GDP estimates by $300Bn, roughly the size of Turkey’s entire economy! It seems they were undercounting their service sector so the Chinese economy is 20% bigger than was previously thought. This places China as the World’s 4th largest economy but growing at a blistering pace.

Expect this information to put pressure on materials markets as all of Asia (and Australia) remain in growth mode.

Even with a robust economy, the Nikkei lost its nerve last night and gave up 300 pts so I have grave concern about today’s session in the states as well.

Europe is not doing so hot with an EU survey showing that the continent’s competitiveness is expected to lag behind the rest of the world through the end of the decade.

The dollar continues to drop so there will be no relief on the price of oil but anything can happen on inventory day.


The gold poker game is on in full force and, as predicted way back on 11/22 (“Metallica Rules), the Arabs just lost a great big pile of chips. Although we called the pullback, I was surprised at the height they took it to before pulling the carpet out! Gold is down from $540 to $515 in just 3 days as the Asian markets have followed through with the relentless American selling.

Copper is still going up, which is strange since copper and gold often come out of the same mines. I also came across an item in Australia suggesting that gold output will be off quite a bit for the next few years so my long-term outlook on gold is still strong but I am leery about calling a bottom as $540 came as a bit of a surprise. Obviously, $500 is a bit of a psychological barrier but the 200 dma is way down at $450 so it is possible that we may see $475ish before the market looks oversold.

If you are in on NEM Jan ’07 $45s, the trade is still good as long as you sold the Jan calls, look to buy them out if they lose 75% of their value so we will have the flexibility to get out or sell down a level.


LEH’s numbers may not have been good enough to rechallenge the high of $133 but it will be a nice buy if it pulls back to $120.…
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Zero Hedge

Visualizing How Much Oil Is In An Electric Vehicle?

Courtesy of ZeroHedge. View original post here.

When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But, as Visual Capitalist's Nicholas LePan notes, there is actually much more to oil’s role, than meets the eye...

Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.

Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical mate...

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Phil's Favorites

Assange's new indictment: Espionage and the First Amendment


Embed from Getty Images


Assange’s new indictment: Espionage and the First Amendment

Courtesy of Ofer Raban, University of Oregon

Julian Assange, the co-founder of WikiLeaks, has been charged by the U.S. Department of Justice with a slew of Espionage Act violations that could keep him in prison for the rest of his life.

The new indictment expands an earlier one charging Assange with conspiring w...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control


Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...

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DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.


DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University


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More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...

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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism


The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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